Reddy defends Emaar-MGF bailout, says acted for Games

Last Updated: Thursday, October 21, 2010 - 18:41

New Delhi: Defending DDA`s financial package
of Rs 760 crore to Emaar-MGF, Union Urban Development Minister
S Jaipal Reddy today said it was given to the private builder
to ensure timely completion of the Games Village project which
was crucial for the mega event.

"Basically there was no bail out (package). It was a buy
back arrangement by the DDA to enable the developer to
complete the Games Village," Reddy said.

He said the contract could have been given to some other
contractor but that would have meant a huge delay in the
project which was crucial for the successful hosting of the
event.

"The DDA apparently went for a buy back arrangement.
Through the buy back, the DDA will make a profit of more than
Rs 300 crore," he said, without elaborating on how DDA will
make the profit.

Reddy said the DDA was taking steps to confiscate the
Rs 183 crore bank guarantee furnished by Emaar-MGF which he
said is "by far the biggest radical step taken in the recent
history".

Acting tough, Government yesterday ordered confiscation
of Rs 183 crore furnished by Emaar-MGF as bank guarantee and
initiation of legal action against it for recovery of other
expenditure for "deficiencies" and "delays" in construction of
the Commonwealth Games Village.

The direction by Union Urban Development Ministry to
Delhi Development Authority came a day after the authority
submitted an interim report in which it said "immediate
action" is required to be taken against the builder
for the "non-execution of the project as per the Agreement".

Holding the private developer responsible for
irregularities in the Village project, Reddy said the
government just wanted to ensure timely completion of the
project.

"It was a failure on the part of the developer. What can
you do with it? You are stuck with it. You could go after the
blood of the developer or you could give up the Games. What
was the priority at that time. Was it going after the blood of
the developer or was it getting the Games Village completed,"
he asked and added that the government did not have a choice.

-PTI



First Published: Thursday, October 21, 2010 - 18:41

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